income will be included in my assessment?
Your assessment to tax for any year is normally
based on your actual income earned in the tax year i.e. from
6 April to the following 5 April.
If your income consists of profits
from a trade, professional or vocation, and your annual accounts
are normally made up to
a date other than 5 April, your assessment will be based on
the profits of your accounting year which ends in the tax year.
If your accounts are prepared for the twelve months ending
on 31 December, the profits for the period to 31 December
2019 will be taken as your profits for the tax year 2019/2020
amount assessed in respect of any other income, e.g. investment
income, rental income etc. is based on the actual income earned
in the tax year, i.e. from 6 April to 5 April.
accounting date should I use?
It is up to you to
decide the date to which you prepare your accounts. You can
prepare your accounts from the date your business started
to any date you choose. Once chosen you usually prepare all
future accounts to the same date each year and this becomes
your accounting year end.
happens if I need to change my accounting year end date?
As your business
changes you may find that your year end date is inconvenient,
for example it may coincide with a time when it is your most
busiest. In such circumstances you will be allowed to change
your year end. There are special rules relating to change
of accounting date and the revenue will ensure no profits
have been left out as a result of the change.
happens if I am in business with someone else in partnership?
If your business is a partnership, there are
special rules to calculate taxable profits. The taxable profits
of the partnership is calculated and then divided between the
partners in accordance with the profit sharing agreement they
have made. Each individual partners tax liability will then be
calculated using the same rules that apply to self employed persons
working on their own.
am I taxed in my start-up years?
There are special rules for taxation of profits
in commencement years,
You are taxed on the profits of
the business from the date you started to the following 5 April.
You are taxed on the profits of the twelve
month period,ending in the second tax year. If there is more
than one accounting
date end in the second year special rules apply. You
will be taxed on the profits of the twelve months to the latest
date ending in the year or on the profits of the tax
Where no accounts are made up to a date in the second
year you will
be taxed on the profits of the tax year.
and subsequent years.
You are taxed on the profits of your accounting
year ending in that tax year.
about my final years?
There are special
rules relating to your final years of trading, basically however
all the profits assessed for tax for all years of your self
employment will equal the sum of all your profits earned during